In the decade since General Motors filed for bankruptcy, the carmaker has paid virtually nothing in federal income tax, despite earning billions in profits — and it could continue like this for another five years.
GM isn't evading Uncle Sam. Federal law allows companies to use past losses to shield future profits from taxes. The tax break, known by the wonky name "net operating loss carryforward," is one the most common tax breaks in corporate America. Most businesses lose money at some point. The tax break is designed to help struggling companies get back on their feet.
GM is an extreme example. It suffered huge losses leading up to its 2009 bankruptcy. By 2010, it was again profitable, and it has essentially been very profitable ever since.
According to corporate filings, GM paid $18 million in federal taxes last year, its largest tax bill since the bankruptcy. Despite the federal tax break, the company paid millions in other kinds of taxes: $83 million in state and local, and $552 million in foreign, taxes last year, for example.
GM paid federal income tax in just three other years since 2010, totaling another $18 million. In most years it posted even larger credits, not an expense, for federal income taxes.